Locally known as “tai tais”, the small and often thrifty demographic, rarely seen without Prada, Chanel or Gucci on their arm, provides the retailer with a steady flow of bags which are later authenticated by Yiu’s team. “Hong Kong ladies are smart and money savvy. Unlike jewellery, the value of handbags will depreciate when they are no longer trendy,” said Yiu.

“It has become a culture in Hong Kong, the ladies will sell the old bag when they get a new one. We are depending on this small group of “tai tais” to sell us the handbags they want to get rid of, and they are the main supply source to other ladies”.

The idea not only turned traditional shopping habits on their ear and made Yiu a rich man himself, but the company set a record for the most popular initial public offering in the Asian financial hub’s history earlier this year.

Investors were abuzz with excitement when the firm, little known outside HK, went to market in May with an initial public offering oversubscribed a whopping 2,180 times.

The share sale smashed a 2006 record and outshone high-end handbag maker Prada, which made its own lacklustre Hong Kong debut around the same time.

“We thought we would do well but it was beyond our expectations that the response was so overwhelming,” said Yiu, surrounded by bags sporting names including Louis Vuitton, Chanel, and Hermes.

From a humble start-up a decade ago with a 100-square-foot (9-square-metre) shop, the pioneering retailer now has 14 outlets, with an eye to further expanding to meet mainland China’s booming demand for luxury goods.

While most customers hope for a big discount, sometimes as much as 30 percent off a bag’s retail price, certain limited edition bags are actually pricier as used collector items, such as the prized Hermes Birkin.

“Ten years ago, there was no such business. People would buy, use and keep the bags at home. When they are no longer trendy, they became trash,” said Yiu.

The company said its share of the proceeds from the float, which saw about 25 percent of the firm sold off for a total of HK$271 million ($35 million), will help it launch 24 new stores in several Chinese cities over three years.

The retailer currently has two stores in Beijing and one each in Shanghai and Macau, a gambling hub about an hour by ferry from Hong Kong, with planned new locations including Chengdu and the southern city of Guangzhou.

“China is like an unexplored oil field,” said Yiu, smiling confidently. “The market is huge, and they have a culture of gift-giving. Some people may not necessarily like the handbags they received so they prefer to trade in the handbags for hard cash.”